Big Short Michael Burry Stock Exit – What It Means For Crypto?

Big Short Michael Burry stock exit could spell disaster for crypto, as the legendary short seller of the 2008 housing bubble, sold almost all of the stocks in his portfolio during the second quarter, raising the possibility that the stock and cryptocurrency markets are in for a bloodbath.

Big Short Michael Burry Stock Exit

Approximately $292 million worth of shares in companies ranging from Apple and Meta to pharmaceuticals giant Bristol-Myers Squibb were sold off by Burry’s hedge fund Scion Asset Management, according to a 13F disclosure report submitted to the Securities and Exchange Commission (SEC) on August 15. Only a small position in a private prison company remained.\

Michael Burry selling everything and buying a large position in a private prison company after seeing the IRS is hiring 87,000 new agents pic.twitter.com/lT5ny4SdlC

— Wall Street Memes (@wallstmemes) August 15, 2022

Burry’s gloomy stance on equities may also be a dangerous sign for the crypto industry because Bitcoin (BTC) and cryptocurrency have a significant association with the stock market, particularly in regard to macroeconomic events like the Russian/Ukrainian conflict and the Federal Reserve interest rate rises.

Foreseeing Pessimistic Events

Burry has a history of foreseeing pessimistic events, but when questioned if his actions would portend doom for the cryptocurrency markets, Quantum Economics founder and CEO Mati Greenspan said that he is largely unconcerned.

According to Greenspan, timing and severity of crashes are very hard to anticipate, and there is often always some unfavorable development that might potentially cause stock and cryptocurrency values to drop.

“Predicting a stock crash is a lot like predicting an earthquake. You know one will happen every so often but you can never tell exactly when or how severe it will be.”

Additionally, he emphasized that investors shouldn’t act immediately upon every piece of FUD that they come across online, saying that investment is a long-term play and doesn’t generally work well for those who act immediately upon shadows.

Winter Is Coming

Despite the recent gains in equities and cryptocurrencies, Burry earlier this month cautioned investors that “winter is coming.” In contrast to its historical average of $28 billion month over month, U.S. consumer credit rates have increased by $40 billion per month, according to him.

As opposed to Greenspan, Seeking Alpha analyst Garret Duyck said in a piece published on August 16 that investors would want to pay attention to Burry’s worries about macro variables including consumer credit, housing, and business conditions.

“I take notice when Michael Burry is a bear and right now he is a huge bear. By liquidating the positions in his portfolio, save one, he is putting his money where his mouth has been: out of the market.”

Michael Burry has been right about a few things. He is most famous for predicting the 2008 housing bubble of course, but in March of 2021, he said that BTC is a speculative bubble that is more risk than opportunity, while also stating that a crash was imminent. This coincided with Bitcoin’s price falling from $59,000 in March to approximately $34,000 by the end of May.

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